AKRON (April 8, 2008) — Chairman and CEO Robert J. Keegan told Goodyear shareholders the firm is "well positioned" for a successful 2008, with debt and legacy obligations expected to fall about $2 billion this year.
Keegan said April 8 at the company's annual meeting that Goodyear expects to see its debt and legacy obligations drop to $6 billion this year, down from around $8 billion last year and half of what they were at year-end 2006.
The company has also been heavily involved in premium segments of the tire market, which Keegan said have “relatively inelastic pricing dynamics.” Additionally, Goodyear has made changes in its fixed cost structure through reductions in high-cost global capacity and plant closures, further improving the company's financial position.
“We remain diligent in our planning relative to economic conditions,” Keegan said. “However, the improvements we have made in our go-to-market model, in our cost structure and in our balance sheet give me confidence that Goodyear is well positioned to continue to progress.”
Keegan mentioned other highlights from 2007, including an 8-percent increase in revenue per tire as a result of changes in pricing and product mixes, a strike-adjusted 24-percent increase in total segment operating income and strong growth in emerging foreign markets.
Keegan said Goodyear is committed to achieving financial goals it set for itself two and half years ago: 8 percent segment operating income return on sales globally, 5 percent segment operating income return on sales in North America and a debt-to-EBITDA ratio of 2.5.